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JUL   27  »*M6 


Co-operation  among  Grocers 
in  Philadelphia 


By  E.  M.  PATTERSON 


Thesis  presented  to  the  Faculty  of  the  Graduate  School 

of  the  University  of  Pennsylvania  in  partial 

fulfilment  of  the  requirements  for 

the  degree  of  Ph.  D. 


CO-OPERATION  AMONG  RETAIL  GROCERS  IN 
PHILADELPHIA 

The  grocery  stores  of  a  large  city  vary  widely  in  the  amount  of 
capital  involved.  A  large  one  may  represent  an  investment  of  from 
$500,000  to  $1,000,000/  but  $500  will  equip  a  store  of  moderate 
size  that  may  yield  a  fair  profit  under  favorable  conditions,  while 
a  much  smaller  sum  invested  in  a  few  groceries  will  supplement 
an  income  derived  from  a  business  of  an  entirely  different  sort.  It 
is  thus  easy  to  enter  the  trade.  Little  is  risked,  and  little  is  lost 
in  case  of  failure.  Some  of  the  stock  is  not  quickly  perishable  and 
may  be  sold  to  fair  advantage  if  creditors  press  their  demands. 

As  a  result  the  business  is  intensely  competitive.  The  profit  on 
each  article  sold  is  small  and  it  is  easy  for  the  grocer  to  be  drawn 
into  price  cutting.  Demand  for  many  articles  is  hard  to  determine, 
and  the  end  of  the  season  will  find  the  careless  buyer  with  his 
shelves  full  of  goods  that  must  be  carried  into  the  next  year.  While 
many  of  the  commodities  handled  are  not  readily  perishable,  fresh 
fruits  and  vegetables  are  an  important  and  expensive  exception. 
Items  of  direct  expenditure  bulk  large.  Clerks,  order  boys,  and 
delivery  boys,  must  be  paid.  Small  orders  must  be  delivered  at  a 
distance  to  avoid  offending  customers.  Trading  stamps  and  other 
kinds  of  premiums  must  perhaps  be  used  to  attract  trade.  Petty 
thieving  and  carelessness  among  employees  are  hard  to  detect  and 
very  difficult  of  correction.  Credit  must  be  extended  to  customers 
with  frequent  heavy  losses  and  always  a  temporary  employment  of 
capital  in  an  unprofitable  manner.  Trade  varies  so  widely  from 
hour  to  hour  and  from  day  to  day  that  it  is  hard  to  keep  employees 
working  regularly.  All  this  emphasizes  the  necessity  of  careful 
management.  It  is  estimated  that  the  grocer  must  make  from  15 
per  cent  to  20  per  cent  gross  profit  in  handling  his  goods  and  that 
"any  one  whose  expenses  do  not  run  over  17%  Per  cent  nas  cause 
to  congratulate  himself."  But  this  margin  of  gross  profit  is  hard 
to  secure.2 

1  Mitchell,  Fletcher  &  Co.  of  Philadelphia  have  an  authorized  capitalization  of 
$500,000  with  $435,000  of  the  stock  outstanding,  besides  bonds  to  the  amount  of 
$200,000. 

2  A  prominent  grocer  from  the  Pacific  Coast  not  long  ago  declared:  "On  the 
Coast  we  handle  no  meats — only  groceries  and  some  liquor  in  sealed  packages. 
.  .  .  Sixty  per  cent  of  our  business  pays  only  from  10  per  cent  to  12  per  cent, 
while  the  majority  .  .  .     need  17  per  cent.     In  most  cases  there  is  a  large 

336265 


280      ' "    "  E.  M.  Patterson  [June 

For  example,  in  Philadelphia  butter  and  eggs  together  represent 
about  36  per  cent  of  the  grocer's  total  sales  and  yield  about  10  per 
cent  profit.  Sugar  represents  7  per  cent  and  always  sells  on  a 
very  narrow  margin.  Flour  yields  16  per  cent  profit;  ham,  bacon 
and  lard  less  than  5  per  cent.  Eggs,  butter,  sugar,  smoked  meats, 
lard,  bread,  flour,  and  potatoes  represent  about  60  per  cent  of  the 
total  sales  and  show  the  retailer  an  average  gross  profit  of  only 
about  9  per  cent.  Evidently  a  large  profit  must  be  derived  from 
other  lines  of  goods  if  the  grocer  is  to  survive.3 

With  this  narrow  margin  of  gain  a  frequent  turnover  of  invested 
capital  is  necessary  and  the  ideal  kept  in  mind  is  an  entire  change 
of  stock  once  each  month  or  twelve  times  per  year.  Needless  to 
say,  this  ideal  is  seldom  attained.  Careful,  intelligent  grocers  with 
fair  credit  can  and  do  make  good  profits  if  conditions  are  at  all 
favorable,  but  it  is  evident  that  many  who  are  easily  drawn  into 
the  trade  may  lack  these  qualities  and  find  the  pressure  of  competi- 
tion very  keen.  For  the  independent  dealer  the  problem  has  in 
recent  years  been  complicated  by  the  appearance  of  the  chain 
stores — a  number  of  stores  under  a  single  management  from  a  cen- 
tral office.  The  economies  gained  from  such  concentration  give 
them  a  distinct  advantage  and  their  competition  is  one  of  the  most 
serious  obstacles  the  independent  grocer  must  face. 

The  result  of  the  conditions  just  cited  is  very  apparent  in 
Philadelphia.  In  1911  there  were  in  the  city  5266  retail  grocery 
stores,  besides  257  delicatessen  stores  that  sell  some  groceries,  and 
2004  butchers  and  retail  meat  dealers,  of  whom  probably  10  per 
cent  or  200  also  sold  groceries.  A  total  of  these  three  groups 
gives  5723  but  does  not  include  a  large  number  of  stores  dealing 
in  a  variety  of  articles  and  hence  hard  to  classify.  Some  of  these 
also  compete  with  the  regular  grocers.  If  we  limit  the  discussion, 
however,  to  the  5723  stores  named,  a  comparison  with  the  popula- 
tion of  the  city,  which  was  1,549,008  in  1910,  shows  one  store  for 
every  270  people  or  one  for  every  54  families.  Or  if  only  the 
5266  stores  are  included  there  is  one  store  for  every  294  people  or 
one  for  every  59  families. 

loss,  i.e.,  from  5  per  cent  to  8  per  cent,  hence  a  large  profit  must  be  added  to 
other  goods.  We  practically  rob  customers  on  teas  and  coffees  to  make  up 
the  balance."     Grocers'  Review,  July,  1910,  p.  246. 

"These  estimates  have  been  furnished  to  the  writer  by  secretary  Reno 
Schoch  of  the  Retail  Grocers'  Association  of  Philadelphia,  who  with  the  other 
officers  of  the  association  has  been  very  courteous  and  helpful  in  giving  assist- 
ance and  in  correcting  errors  in  the  preparation  of  this  paper. 


1915]     Cooperation  among  Retail  Grocers  in  Philadelphia        281 

It  is  impossible  to  average  the  amount  of  business  done  by  each 
store,  but  perhaps  $200  per  annum  may  be  assumed  as  the  ex- 
penditure of  an  average  family  for  groceries,  excluding  meat  and 
milk.  For  59  families  the  expenditures  would  total  $11,800.  A 
gross  profit  of  20  per  cent  on  this  would  be  $2360  from  which  the 
grocer  must  meet  all  of  his  expenses.4 

The  Retail  Grocers'  Association  of  Philadelphia  is  an  attempt  to 
meet  these  conditions.  It  was  formed  in  1886  to  protest  against 
the  payment  of  a  tax  of  $10  per  annum  on  all  retailers  of  oil.  The 
protest  was  successful  and  the  organization  became  permanent. 
Its  size  has  of  course  varied  from  year  to  year,  but  in  1915  there 
are  458  members — less  than  8  per  cent  of  the  6200  grocers  of 
the  city.  This  is  no  indication,  however,  of  the  strength  of  the 
association,  as  its  membership  includes  the  best  and  strongest  of 
the  retail  grocers,  with  the  exception  of  the  chain  stores. 

The  strength  of  the  organization  has  been  due  to  many  factors. 
One  of  the  most  important  of  these  has  been  the  addition  of  num- 
erous features  which  have  bound  the  members  closely  together  and 
encouraged  the  feeling  of  a  common  interest.  Some  of  these  are 
usual  but  others  are  a  little  out  of  the  ordinary.  Two  building 
and  loan  associations,  a  horse  insurance  fund,  a  fire  insurance 
company,  a  monthly  magazine,  a  death  benefit  fund,  and  a  jobbing 
house  are  all  more  or  less  directly  a  part  of  the  association.  Just 
as  much  as  possible  of  the  life  of  each  member  has  been  made  to 
center  about  the  organization.  Standards  of  membership  have 
been  gradually  raised  until  now  all  candidates  are  passed  by  a 
committee.  Each  member  must  purchase  two  shares  of  stock  at 
$100  each  in  the  Girard  Grocery  Company,  pay  an  admission  fee 
of  $25  and  $1.50  as  dues  for  one  quarter  in  advance,  making  a 
total  of  $226.50.  Any  one,  whether  a  member  or  not,  may  buy 
from  the  Girard  Grocery  Company,  which  is  a  jobbing  house 
separately  incorporated,  but  only  members  of  the  association  own 

4  Expenses  per  annum  would  involve  at  least  the  following: 

1  clerk   $520 

2  boys 250 

Rent    250 

Heat  and  light 100 

Horse  feed  and  repairs 300 

Trading  stamps  300 

$1720 
Under  the  assumption  made  above  this  would  leave  only  $640  to  cover  all 
other  expenses  and  furnish  the  income  of  the  grocer  himself. 


282  E.  M.  Patterson  [June 

stock  and  receive  dividends,  which  have  been  5  per  cent  per  annum 
since  its  organization  in  1908. 

The  history  of  this  association  shows  clearly  the  advantages  of 
cooperation  by  retail  dealers  and  suggests  what  such  organizations 
can  and  can  not  succesfully  do.  The  remainder  of  this  paper  will 
be  an  analysis  of  the  leading  activities  of  the  association  with  the 
purpose  of  showing  what  ones  have  been  successful.  These  cooper- 
ative movements  may  be  discussed  in  three  groups:  (1)  the  un- 
successful, (2)  those  of  doubtful  or  partial  success,  and  (3)  the 
successful. 

1.  The  unsuccessful. — Several  of  the  unsuccessful  ventures  re- 
quire only  brief  mention.  An  employment  bureau  free  both  to 
clerks  and  to  employers  met  with  but  little  favor  and  was  finally 
dropped.  The  same  fate  has  met  several  plans  for  cooperative 
advertising,  probably  because  group  advertising  can  do  little  to- 
ward emphasizing  the  individuality  of  each  member.  One  at  least 
of  the  plans  was  devised  to  contrast  the  association  stores  as 
strongly  as  possible  with  the  chain  stores,  but  even  this  appeal 
failed  to  rouse  the  individual  grocer  to  its  advantages. 

When  opportunities  to  buy  special  articles  at  reduced  rates  were 
thrown  open  to  members  little  interest  was  shown.5  In  1893  special 
prices  for  coal  proved  unattractive.  In  1904  arrangements  were 
made  for  members  to  secure  bread  at  a  saving  of  one  half  cent  pei 
loaf,  the  plan  being  a  movement  in  opposition  to  the  regular  bakers 
who  were  selling  direct  to  consumers.  This  slight  advantage  and 
indirect  benefit  did  not  appeal  to  the  grocers  and  the  plan  was 
soon  abandoned. 

At  various  times  feeling  against  the  Standard  Oil  Company  grew 
very  strong.  Charges  of  discrimination  and  unfair  price  cutting 
were  made  and  in  1902  this  hostility  took  tangible  form  in  the 
organization  of  the  West  Virginia  Refining  Company  which  was 
managed  by  the  association.  Many  members  subscribed  for  stock, 
and  delivery  of  the  oil  was  actually  begun,  but  in  a  little  over  a 
year  the  company  was  dissolved.  Fortunately  none  of  the  members 
lost  anything,  every  dollar  that  was  paid  in  being  returned. 

The  plans  just  described  seem  to  have  failed  because  gain  to  the 
members  was  indirect.  The  collection  and  credit  departments 
failed  for  different  reasons.  The  first  of  these  was  started  in 
1886,  as  a  method  of  aiding  the  members  of  the  association  in  the 

"These  purchases  were  not  a  part  of  the  general  cooperative  buying  to  be 
discussed  later. 


1915]     Cooperation  among  Retail  Grocers  in  Philadelphia        £83 

collection  of  bad  debts.  It  was  dropped  in  1894  because  of  financial 
loss  but  reorganized  in  the  same  year.  The  last  of  the  methods 
employed  by  this  department  was  to  furnish  each  member  a  com- 
mon form  of  letter  to  be  sent  to  each  delinquent  customer,  warn- 
ing him  that  unless  his  account  was  settled  by  a  specified  date  the 
bill  would  be  turned  over  to  the  association  for  collection.  If  this 
was  ignored  the  secretary  of  the  association  notified  the  delinquent 
that  unless  the  account  was  settled  within  a  certain  time,  it  would 
go  to  an  attorney  for  collection  and  the  delinquent's  name  be  placed 
on  a  list  furnished  periodically  to  each  member.  Failure  to  settle 
would  bring  another  letter  from  the  secretary  informing  the  de- 
linquent that  after  a  specified  date  either  legal  steps  would  be  taken 
to  enforce  payment  or  the  account  would  be  placed  in  the  hands 
of  collectors  who  would  call  weekly.  At  the  expiration  of  the 
time  allowed  the  secretary  used  his  judgment  between  the  Keystone 
Collection  Agency  and  a  lawyer. 

Just  how  much  money  may  have  been  collected  by  each  grocer 
through  the  first  of  the  letters  described  can  not  be  known.  It  is 
clear,  however,  that  the  members  hesitated  to  inform  even  the  secre- 
tary of  the  association  of  the  extent  of  their  bad  debts  and  that 
only  the  worst  of  their  accounts  were  handed  over  for  collection. 
Doubtless  many  also  were  influenced  by  the  fear  of  offending  their 
customers.  The  department  proved  a  failure  and  is  no  longer  in 
existence. 

For  a  number  of  years  a  credit  department  was  mamtained. 
Upon  the  request  of  any  member  the  association  would  investigate 
the  standing  of  any  applicant  for  credit  at  a  cost  of  50  cents  each 
(later  reduced  to  25  cents).  The  members  used  this  department 
but  little.  In  1903  each  member  was  furnished  with  a  pass  book 
containing  a  memorandum  of  agreement  between  the  grocer  and  his 
customer,  also  a  waiver  of  the  exemption  law.  Little  interest  was 
shown,  the  trouble  with  all  of  these  credit  devices  apparently  being 
the  fear  of  offense  to  customers. 

The  association  has  always  been  opposed  to  price  cutting, 
viewing  as  a  "cutter"  one  who  "buys  staple  goods,  pays  as  much  as 
his  neighbor  and  sells  without  profit  to  embarrass  and  destroy  his 
competitor."  When  the  chain  store  made  its  appearance  with  low 
prices  and  numerous  special  bargains  it  was  a  dangerous  rival 
and  for  some  years  was  viewed  with  intense  hostility.  During  the 
hard  times  in  1893  and  1894  cutting  was  common  among  all  gro- 
cers, but  by  1895  criticism  of  the  practice  was  directed  more  spe- 


284  E.  M.  Patterson  [June 

cifically  against  the  chain  stores.  The  success  of  these  stores  was 
chiefly  due:  (1)  to  the  fact  that  the  regular  grocers  were  hampered 
by  the  credit  system  which  used  unproductively  a  large  amount  of 
capital:  (£)  to  their  selling  strictly  for  cash  making  possible  a 
quick  turnover  of  capital  and  the  taking  advantage  of  cash  dis- 
counts; (3)  to  the  elimination  of  losses  from  bad  bills;  and  (4) 
to  their  ability  to  purchase  in  large  quantities  from  the  jobber  or 
direct  from  the  manufacturer.  As  early  as  1897  it  was  reported 
that  some  of  these  concerns  were  satisfied  if  they  cleared  $10  per 
week  from  each  of  their  stores. 

To  meet  this  competition  the  association  employed  four  methods. 
The  first  was  due  to  the  accusation  that  one  group  of  the  chain 
stores  was  owned  and  managed  by  a  wholesale  grocery  house.  The 
association  favored  the  withdrawal  of  patronage  from  this  j  obber  in 
case  the  rumor  proved  true.  As  the  incident  was  of  minor  impor- 
tance and  nothing  more  is  heard  of  it  discussion  is  unimportant. 

A  second  method  was  the  agreement  to  ask  manufacturers  to 
limit  the  prices  at  which  their  goods  could  be  retailed ;  and  a  num- 
ber of  manufacturers  expressed  their  willingness  to  cooperate.  But 
with  the  gradual  return  of  prosperity  the  inducements  to  price 
cutting  largely  disappeared. 

A  third  form  of  attack  was  employed  when  the  association 
pledged  its  support  to  those  manufacturers  who  would  keep  their 
goods  out  of  cut  price  stores,  including  the  grocery  departments  of 
department  stores.  In  this  case  also  support  was  secured  from 
the  manufacturers,  but  the  chain  stores  were  too  numerous  and  too 
strong.  In  1904  there  were  said  to  be  600  of  them  in  the  city, 
grouped  under  eight  or  ten  ownerships,  while  only  750  members 
were  claimed  for  the  association.  Under  such  circumstances  the 
manufacturers  could  hardly  be  expected  to  refuse  to  sell  direct  to 
the  chain  store  retailers,  especially  as  the  association  was  itself  now 
endeavoring  to  buy  direct  from  the  manufacturers  and  opposition 
to  the  chain  stores  doing  a  similar  thing  was  inconsistent. 

The  fourth  and  most  persistent  form  of  opposition  was  the 
endeavor  to  secure  hostile  legislation.  As  early  as  1897  it  was 
proposed  that  the  state  legislature  be  requested  to  limit  the  number 
of  grocery  stores  under  a  single  ownership  to  one,  but  no  action 
was  taken.  In  1899  there  was  introduced  in  the  legislature  the 
"Fow"  bill  which  provided  for  a  tax  on  any  person,  firm,  partner- 
ship, or  corporation  doing  mercantile  business  in  the  commonwealth 
which  maintains  more  than  three  separate,  non-contiguous  places 


1915]     Cooperation  among  Retail  Grocers  in  Philadelphia        285 

for  the  sale  of  goods.  This  tax  was  to  be  $500  for  each  place  above 
three,  and  to  be  in  addition  to  the  regular  tax  or  license.  The 
bill  passed  the  house  by  a  vote  of  156  to  1  but  failed  in  the  senate 
by  a  vote  of  14  to  14,  21  senators  failing  to  vote. 

About  this  time  the  Woman's  Sanitary  League  introduced  into 
city  councils  an  ordinance  forbidding  bills,  circulars,  advertise- 
ments, etc.,  to  be  placed  in  streets,  footways,  vestibules,  yards,  and 
porches,  under  penalty  of  a  fine  of  $20  for  each  offense.  The 
ordinance  in  existence  prior  to  this  time  had  merely  forbidden  their 
being  placed  on  sidewalks  and  in  streets.  The  association  at  once 
pledged  its  support  to  this  measure.  It  was  passed  by  councils, 
but  was  persistently  violated  pending  a  decision  by  the  courts. 
When  finally  sustained  in  the  following  year  the  chain  stores  at 
once  evaded  it  by  publishing  "newspapers"  which  were  exempt 
from  the  provisions  of  the  ordinance.  The  device  is  the  simple 
one  of  issuing  a  four-page  sheet,  the  first  three  pages  of  which 
contain  a  miscellaneous  collection  of  "news,"  while  the  fourth  is 
given  up  to  a  full  page  advertisement  of  the  company  issuing  it. 
The  chain  stores  still  employ  this  form  of  advertising. 

Opposition  to  the  chain  stores  thus  proved  futile  and  their  value 
and  strength  were  gradually  recognized.  Later  when  both  the 
association  and  the  chain  stores  became  involved  in  a  contest  with 
the  jobbers  over  the  right  to  purchase  direct  from  the  manufac- 
turers, their  common  difficulty  brought  them  together.  Reference 
to  the  meeting  then  held  is  as  follows:  "Both  branches  of  the 
trade  realized  that  their  interests  in  many  matters  were  mutual 
and  without  doubt  the  meeting  will  result  in  great  good  to  all 
concerned." 

Another  unsuccessful  movement  was  directed  against  the  giving 
of  premiums,  especially  through  the  medium  of  the  trading  stamp. 
Opposition  to  premiums  was  based  on  the  principle  that  whatever  a 
grocer  puts  into  gifts  must  be  taken  from  his  profits  or  from  the 
quality  of  the  goods  sold.  An  obstacle  was  found  in  the  attitude  of 
the  manufacturers,  who  persistently  offered  premiums,  but  this  was 
of  little  importance  to  the  grocer  compared  with  his  difficulty  over 
trading  stamps.  Before  1902  little  attention  was  given  to  the 
problem,  although  in  1901  an  anti-stamp  bill  was  introduced  into 
the  state  legislature.  In  1902  the  association  began  to  appreciate 
the  seriousness  of  the  evil  and  passed  vigorous  resolutions  con- 
demning the  use  of  stamps,  pledging  all  of  its  members  not  to  use 
them  and  to  employ  all  possible  efforts  to  discourage  their  use  by 


286  E.  M.  Patterson  [June 

others.  Hostile  legislation  was  also  approved.  The  next  year  a 
bill  was  introduced  into  the  legislature  requiring  any  person  or 
association  issuing  stamps  to  redeem  them  on  demand  either  in 
goods  or  in  cash.    This  bill  passed  but  was  vetoed. 

The  Philadelphia  association  discussed  the  use  of  mutual  cou- 
pons to  protect  themselves  against  the  stamp  companies,  but  did 
not  adopt  them.6  They  next  decided  to  circulate  for  the  signature 
of  all  the  grocers  of  the  city  an  agreement  not  to  handle  trading 
stamps.  Also  membership  in  the  association  was  made  contingent 
on  a  refusal  to  use  stamps. 

In  spite  of  these  efforts  the  use  of  the  stamp  spread.  Siegel, 
Cooper  and  Company  of  New  York  City  were  said  to  have  in- 
creased their  cash  sales  by  25  per  cent  through  their  use.  The 
manufacturers  of  "Force"  adopted  an  advertising  plan  involving  a 
trading  stamp  attachment  that  the  retailers  alleged  practically 
compelled  them  to  become  allies  of  the  Green  Trading  Stamp. 
Competition  between  the  grocers  was  keen,  and  pressure  on  the 
association  grew  so  heavy  that  in  April,  1904,  all  the  stringent 
resolutions  against  stamps  were  rescinded  and  members  allowed 
to  use  their  own  judgment.  The  association  announced  itself  as 
still  opposed  to  the  practice  and  at  no  time  since  have  any  very 
large  number  of  the  members  used  stamps;  but  the  fight  against 
them  was,  on  the  whole,  unsuccessful. 

2.  Of  doubtful  or  partial  success. — In  its  attempts  to  influence 
legislation  the  association  has  been  at  times  successful,  at  other 
times  unsuccessful.  Reference  has  already  been  made  to  some 
efforts  that  were  failures,  or  at  least  only  qualified  successes.  In 
other  cases  more  has  been  accomplished.  Pure  food  bills  have  been 
aided  and  numerous  bills  unfavorable  to  the  grocers  have  been 
killed.  On  the  whole,  the  activity  of  the  association  in  this  line 
seems   commendable. 

It  is  hard  to  determine  the  influence  of  agitation  against  the 
introduction  of  grocery  departments  into  the  large  department 
stores  of  the  city.  Their  value  to  department  stores  is  somewhat 
problematical  and  the  absence  of  them  in  Philadelphia  may  be 
due  to  this  rather  than  to  the  hostility  of  the  regular  grocers.  In 
1895  John  Wanamaker  withdrew  from  his  second  attempt  to 
establish  such  a  department  and  in  1902  definitely  pledged  himself 

•These  mutual  coupons  were  at  the  time  being  tried  in  other  places,  e.g., 
Erie  and  Scranton,  Pa.,  and  Mansfield,  Ohio.  Though  an  apparent  success  for 
a  time,  they  were  later  found  unsatisfactory. 


1915]     Cooperation  among  Retail  Grocers  in  Philadelphia        287 

not  to  reenter  the  field.  Other  stores  have  tried  the  plan,  but  at 
present  only  one  such  department  is  in  operation. 

In  St.  Louis  the  retail  grocers  accomplished  their  purpose  by 
compelling  wholesalers  to  refuse  to  sell  to  the  department  stores 
and  by  boycotting  the  offensive  department  stores  in  purchases  of 
all  lines  of  goods.  The  latter  method  seems  not  to  have  been  tried 
by  the  Philadelphia  association.  The  means  employed  were  four 
in  number :  ( 1 )  promise  of  patronage  to  those  manufacturers  who 
refused  to  sell  groceries  to  department  stores  and  withdrawal  of 
patronage  from  those  who  would  not  refuse;  (2)  securing  definite 
pledges  from  manufacturers  not  to  sell  to  department  stores;  (3) 
keeping  manufacturers  informed  of  cuts  below  regular  retail  prices 
wherever  such  cuts  were  observed;  and  (4<)  encouraging  the  sale 
of  goods  under  the  Exchange  brand — the  Grocers'  Exchange  being 
an  allied  organization. 

These  methods  were  employed  with  much  vigor  from  1897  to 
1902.  Numerous  manufacturers  promised  not  to  sell  to  depart- 
ment stores,  and  the  secretary  was  instructed  to  furnish  members 
with  a  list  of  goods  handled  in  department  stores  for  their  guidance 
in  making  purchases.  That  only  one  of  these  department  store 
groceries  is  now  in  existence  in  the  city  is  for  the  reason  mentioned 
above  not  in  itself  conclusive  proof  that  these  efforts  were  suc- 
cessful. 

From  time  to  time  the  association  has  been  engaged  in  contests 
with  various  manufacturers.  Reference  has  been  made  to  failure 
of  the  fight  against  the  Standard  Oil  Company.  Little  if  anything 
more  was  gained  in  its  conflict  with  the  National  Biscuit  Company. 
This  company  was  charged  by  the  association  with  the  following 
abuses:  (1)  compelling  the  trade  to  pay  at  merchandise  rates  in- 
stead of  tare  for  cardboard  and  excelsior  used  in  packing  crackers. 
(2)  discriminating  in  favor  of  the  chain  store  cutters,  giving  them 
prices  and  favors  denied  absolutely  to  association  members;  (3) 
insulting  and  ridiculing  the  grocer  in  advertising  its  package 
goods ;  and  (4)  neglecting  to  mark  the  weight  of  contents  on  pack- 
age goods.  7  The  fight  was  continued  for  several  years  with  some 
injury  to  the  trade  of  the  National  Biscuit  Company,  but  no 
permanent  advantages  were  gained. 

The  attempts  of  the  association  to  control  prices  have  met  with 
only  partial  success.  The  attempts  have  been  both  direct  and 
indirect — the   former  proving   a   flat   failure.     In    1889   a    sugar 

7  Grocers'  Review,  April,  1901,  p.  56. 


288  E.  M.  Patterson  [June 

card  giving  the  prices  at  which  members  were  to  sell  sugar  was 
issued,  but  the  results  were  disastrous.  "Thousands  of  dollars 
were  contributed  towards  the  expense  of  the  movement ;  men  were 
employed  to  canvass  the  trade;  the  members  volunteered  to  can- 
vass their  wards ;  the  wholesalers  brought  their  powerful  influence 
to  bear;  thousands  of  signatures  were  secured  and  the  price  of 
sugar  was  fixed  by  the  association."8  The  result  (as  described 
in  1901)  was  that  these  "card  prices  nearly  broke  up  the  associa- 
tion and  to  this  day  the  evil  influence  of  the  attempt  is  felt."  u 
In  1896  another  movement  for  fixing  sugar  prices  was  started  be- 
cause of  the  low  prices  prevailing  at  the  time.  A  committee  was 
appointed  which  sought  the  aid  of  the  American  Sugar  Refining 
Company.  This  company  merely  referred  the  matter  to  the  whole- 
salers, and  the  committee  reported  against  making  any  attempt  to 
control  the  price.  The  obstacles  mentioned  by  the  committee  in  its 
report  were  the  lack  of  desire  on  the  part  of  the  members  for  an 
agreement,  the  fear  of  "cutters,"  the  necessity  of  a  signed  agree- 
ment and  a  cash  deposit  by  every  grocer  in  Philadelphia,  the  fear 
that  wholesalers  could  be  forced  by  the  courts  to  sell  to  grocers  who 
cut  prices,  and  the  possibility  of  retailers  purchasing  sugar  outside 
the  city.  The  committee  concluded:  "We  are  honest  in  our  belief 
that  it  is  not  within  the  province  of  the  organization  to  fix  the  price 
at  which  goods  shall  be  sold  and  that  any  attempt  to  do  so  will  be 
disastrous."  10 

Another  method  of  attempting  to  control  prices  directly  has 
been  that  of  requesting  members  "to  adhere  to  a  certain  retail  sell- 
ing price  for  a  particular  article  listed  that  week,"11  but,  in  gen- 
eral, attempts  at  direct  price  control  have  been  abandoned. 

The  same  can  not  be  said  of  indirect  control.  For  fifteen  years 
or  more  the  association  has  been  endeavoring  to  persuade  the 
manufacturers  to  fix  the  price  at  which  their  products  are  to  be 
retailed  and  to  refuse  to  sell  them  to  wholesalers  and  retailers  who 
will  not  maintain  the  prices  so  fixed.  The  manufacturers  have 
in  many  cases  been  willing  to  do  everything  in  their  power  to  secure 
price  maintenance  as  an  encouragement  to  the  retailer  to  handle 
their  goods  exclusively.  At  a  meeting  on  April  12,  1897,  the  asso- 
ciation  unanimously   agreed   to    request   manufacturers    to   limit 

•  Grocers'  Review,  July,  1896,  p.  138. 
•Ibid.,  April,  1901,  p.  48. 
10  Ibid.,  July,  1896,  p.  138. 
u  Ibid.,  Nov.,  1910,- p.  541. 


1915]     Cooperation  among  Retail  Grocers  in  Philadelphia        289 

prices  at  which  their  goods  were  to  be  retailed.  A  number  of 
manufacturers  promptly  expressed  their  willingness  to  cooperate 
in  this  and  other  matters.  One  of  the  most  definite  expressions  on 
the  point  was  given  at  a  conference  of  manufacturers,  jobbers,  and 
retailers  in  New  York  City  on  April  6  and  7,  1909.  The  organiza- 
tions represented  were  The  American  Specialty  Manufacturers' 
Association,  The  National  Wholesale  Grocers'  Association,  and 
the  The  National  Retail  Grocers'  Association.  At  this  meeting  a 
resolution  was  passed  that  the  specialty  manufacturers  should  fix 
the  price  to  the  consumer,  but  that  the  prices  should  not  be  placed 
by  the  manufacturers  on  the  package.  Another  significant  resolu- 
tion passed  at  the  same  time  was  as  follows: 

Resolved  that  it  is  the  sense  of  this  conference  that  we  are  opposed 
to  the  factory-to-family  plan,  because  it  is  a  trade  demoralizer  and, 
in  itself,  is  degrading; 

That  the  conferees  representing  various  interests  here  acquaint 
their  members  with  the  danger  of  this  movement  and  that  they  urge 
them  to  instruct  their  employees  to  do  what  they  can  to  educate  the 
public  as  to  the  fallacy  of  the  theory  that  the  factory-to-family  plan 
means  an  economy  to  the  family,  and  that  the  regular  channel  of 
distribution  is  from  the  retailer  to  the  consumer,  and  the  same  is  the 
most  economical  means  of  delivering  goods  to  the  consumer;  and  is 
in  that  manner  a  protection  to  the  consumer.12 

Another  specific  illustration  of  the  policy  of  the  manufacturers 
on  this  point  is  found  in  the  decision  in  1909  of  the  A.  &  W.  Thum 
Company,  manufacturers  of  "Tanglefoot"  fly  paper,  to  supply 
"only  such  of  the  wholesale  trade  as  maintain  the  manufacturers* 
fixed  selling  price."  At  about  the  same  time  The  N.  K.  Fairbank 
Company  decided  to  paste  on  each  package  of  its  product  a  sticker 
specifying  that  the  goods  were  sold  only  on  condition  that  they 
were  retailed  at  no  less  than  specified  prices,  and  declaring  both 
wholesaler  and  retailer  liable  to  The  N.  K.  Fairbank  Company  to 
the  amount  of  $50  for  each  breach  of  this  condition,  not  as  a 
penalty  but  as  liquidated  damages.13 

3.  The  successful. — One  of  the  most  significant  of  the  victories 
of  the  association  was  the  one  gained  over  the  jobbers.  In  1892 
some  of  the  members  organized  a  Buyers'  Exchange.  In  1899  this 
was  purchased  by  the  association  and  its  advantages  thrown  open 
to  all  members.  It  was  capitalized  in  1903.  As  this  exchange  pur- 
chased goods  in  such  quantities  as  to  be  able  to  buy  direct  from 

18  Grocers'  Review,  May  1909,  pp.  140,  142. 
18  Ibid.,  March  1909,  pp.  18  and  38. 


290  E.  M.  Patterson  [June 

the  manufacturers,  the  hostility  of  the  jobbers  was  aroused  and 
they  appealed  to  the  manufacturers  to  take  the  association  from 
its  list  of  those  who  could  buy  direct  at  lowest  prices.  Some  of 
the  manufacturers  yielded  to  the  pressure,  among  them  The 
Natural  Food  Company,  The  Toasted  Corn  Flake  Company, 
Proctor  and  Gamble,  and  The  Diamond  Match  Company.  The 
association  in  reply  adopted  resolutions  pledging  its  members  to 
"place  no  orders  for  specialties  or  new  goods  unless  the  same  be 
billed  through  the  Retail  Grocers'  Association."  ' 

The  manufacturers  insisted  that  this  action  was  merely  a  part 
of  their  general  policy  and  that  similar  associations  in  other  cities 
had  also  been  taken  from  their  lists.  The  association  pointed  out 
that  the  chain  stores  had  not  been  dropped.  The  jobbers  main- 
tained that  the  normal  route  was  from  manufacturer  to  jobber  to 
retailer  and  thence  to  consumer,  while  the  retailers  held  that  only 
quantity  should  determine  the  right  to  purchase  from  the  manu- 
facturer. The  association  felt  that  only  through  cooperative 
buying  had  the  independent  retailer  been  able  to  maintain  himself 
in  the  face  of  the  competition  of  the  chain  store. 

The  solution  came  quickly  and  was  simple.  The  trouble  had 
been  brewing  for  years  and  had  broken  out  in  1907.  On  January 
13,  1908,  the  association  sold  the  Buyers'  Exchange  to  the  Girard 
Grocery  Company,  a  corporation  separately  organized  to  do  a 
jobbing  business.  This  company  is  ready  to  sell  to  all  who  wish 
to  buy  and  who  will  conform  to  its  rules  for  prompt  payment.  The 
stock  of  the  company  is  sold  only  to  members  of  the  association  and 
has  paid  5  per  cent  per  annum  since  organization  besides  regular 
annual  additions  to  surplus.  The  annual  report  for  1911  showed 
$2,049,065  as  the  total  receipts  and  disbursements  for  the  year. 
The  gross  profit  of  the  jobber  is  usually  estimated  at  10  per  cent. 
The  Girard  Grocery  Company  buys  direct  from  the  manufacturer 
and  handles  goods  at  a  minimum  cost  with  no  charges  for  delivery 
and  with  no  salesmen.  In  1911  the  cost  was  2.54  per  cent.  From 
the  start  the  company  has  been  a  complete  success. 

A  review  of  these  activities  is  encouraging  from  the  standpoint 
of  the  association.  Its  purpose  is  not  to  lower  retail  prices  nor  in 
any  other  way  directly  benefit  the  consumer.  Its  problem  is  to 
determine  the  advantages  of  cooperation  among  retailers  and  to 
devise  ways  and  means  of  making  that  cooperation  effective.  Some 
of  its  plans  have  failed  and  others  have  succeeded. 


1915]      Cooperation  among  Retail  Grocers  in  Philadelphia         291 

There  remains  for  consideration  whether  the  methods  that  have 
been  adopted  have  been  in  harmony  with  the  attitude  of  the 
courts.  The  larger  part  of  the  activities  described  are  not  open 
to  question.  The  conduct  of  an  employment  agency,  cooperative 
advertising  and  campaigns  against  the  use  of  trading  stamps 
may  not  have  been  successful,  but  they  have  been  legal.  Coopera- 
tive buying  direct  from  the  manufacturer  has  been  both  successful 
and  legal.  There  are,  however,  several  other  movements  of  the 
association  whose  legality  is  not  so  clear. 

The  first  of  these  to  notice  is  the  conduct  of  the  collection  and 
credit  departments.  Both  of  them  proved  failures,  but  in  other 
places  or  perhaps  in  Philadelphia  under  other  conditions  they 
may  be  successful.  Their  successful  operation  is  largely  de- 
pendent on  the  ability  of  the  association  to  prevent  a  delinquent 
customer  of  one  member  from  obtaining  credit  at  the  stores  of 
other  members.  This  involves  the  blacklist,  whose  legality  has 
been  questioned.  There  seems  to  be  no  doubt,  however,  that  such 
lists  would  be  held  entirely  legal  under  the  circumstances  involved 
here.  The  relation  is  not  that  of  employer  to  employee,  but  that 
of  a  body  of  tradesmen  desiring  protection  against  a  delinquent 
debtor.  In  one  instance,  Heim  Brewing  Company  vs.  Belinder, 
such  an  agreement  was  held  to  be  within  the  prohibition  of  the 
Missouri  anti-trust  act,  but  the  court  intimated  that  a  combina- 
tion against  a  dishonest  debtor  might  have  been  differently  re- 
garded.14 In  general  an  agreement  among  the  members  of  such 
an  association  not  to  deal  with  a  person  indebted  to  one  of  their 
number  has  been  considered  justified  by  their  common  interest  in 
protecting  themselves  against  delinquent  debtors.15  In  Reynolds 
vs.  Plumbers'  Protective  Association16  a  similar  conclusion  is 
reached,  but  is  based  on  the  doctrine  of  privileged  communica- 
tions. The  court  held  it  not  unlawful,  when  a  debtor  failed  to 
settle  with  a  member  of  the  corporation  or  present  some  reason 
for  not  doing  so,  for  the  association  to  send  each  member  a  state- 
ment that  the  debtor's  name  had  been  entered  on  its  books  and 
that  the  members  were  prohibited  from  selling  him  goods,  except 
for  cash  before  delivery,  until  he  should  have  settled. 

While  the  collection  and  credit  departments  would  thus  be  able 
to  operate  without  encountering  legal  obstacles,  the  same  cannot 
be  said  of  all  the  methods  employed  by  the  association  in  opposing 
the  chain  store  and  department  store  grocery  and  in  attempting 
to  prevent  price  cutting.     In  its  warfare  on  the  chain  store  and 

"97  Mo.  App.,  78;  71  S.  W.,  696. 

1B  F.  H.  Cooke,  "The  Law  of  Combinations,  Monopolies  and  Labor  Unions," 
p.  45. 

lfl30  Wis.,  409;  63  N.  Y.  Suppl,,  303.     (Supra.  Ct.  Tr.  T.,  1900.) 


292  E.  M.  Patterson  [June 

the  department  store  grocery  the  association  promised  its  patron- 
age to  those  manufacturers  who  kept  their  goods  from  such 
stores.17  That  there  was  at  least  an  implied  agreement  to  refuse 
patronage  to  those  manufacturers  who  did  not  refuse  is  evidenced 
by  the  instructions  to  the  secretary  of  the  association  to  furnish 
members  with  a  list  of  the  goods  sold  in  department  stores  for 
their  guidance  in  making  purchases.18  Such  an  agreement,  if 
brought  to  the  attention  of  the  court,  would  undoubtedly  be  de- 
clared an  unfair  method  to  use  in  competition.  The  declaration 
of  the  courts  is  to  the  effect  that  "when  a  combination  exerts  its 
force  upon  outside  dealers  to  prevent  them  from  having  any  rela- 
tions with  rivals  of  the  combination,  the  rivals  have  an  action  for 
the  damages  caused  by  the  interference."19  The  decision  in 
Brown  &  Allen  vs.  Jacobs  Pharmacy  Company  (115  Ga.,  429) 
makes  this  clear.  The  Atlanta  Retailers'  Association  had  notified 
the  Wholesalers'  Association  that  no  retailer  in  the  association 
would  buy  of  any  wholesaler  who  sold  to  the  rate  cutter.  An 
injunction  was  at  once  granted  against  this  concerted  action,  the 
court  declaring:  "The  individual  right  is  radically  different  from 
the  combined  action.  The  combination  has  hurtful  powers  and 
influences  not  possessed  by  the  individual.  .  .  .  To  protect  the 
individual  against  encroachments  upon  his  rights  by  a  greater 
power  is  one  of  the  most  sacred  duties  of  the  courts."20 

Moreover  it  is  by  no  means  certain  in  view  of  the  decisions  cited 
that  the  court  would  not,  under  the  circumstances,  hold  that  an 
agreement  to  purchase  from  manufacturers  who  did  not  sell  to 
certain  stores  as  in  effect  an  agreement  not  to  purchase  from 
others,  and  hence  unlawful. 

The  association  can  hope  to  gain  nothing  from  attempts  to  con- 
trol the  prices  at  which  members  sell  commodities.  If  the  mem- 
bers of  the  association  are  too  weak  in  numbers  and  influence  to 
have  any  substantial  control  over  the  supply  there  would  be  no 
purpose  in  forming  the  agreement,  as  nothing  could  be  accom- 
plished. 

However,  such  an  agreement  would  not  be  held  unlawful.21  If, 
however,  the  association  among  its  own  membership  or  with  the 
aid  of  outsiders  were  able  to  exercise  sufficient  control  to  make 

"Supra,  p.  287. 

18  Ibid. 

"Bruce  Wyman,  "The  Control  of  the  Market,"  pp.   98,  99. 

20  See  also  the  decision  in  Bailey  vs.  Master  Plumbers'  Association  (103 
Tenn.,  99),  which  is  equally  clear  on  this  point. 

21  There  are  numerous  decisions  on  this  point.  See,  e.  g.,  National  Distilling 
Company  vs.  Cream  City  Importing  Company,  86  Wis.,  352;  Heniman  vs. 
Menzies,  115  Cal.,  16. 


1915]      Cooperation  among  Retail  Grocers  in  Philadelphia         293 

their  efforts  worth  while,  monopoly  power  at  once  exists  and  the 
agreement  is  unlawful.22  In  other  words,  the  illegality  lies  not  in 
the  agreement  itself,  but  in  the  power  to  restrict  competition  that 
follows  from  the  agreement.  Thus  the  attempt  in  1889  to  main- 
tain the  price  of  sugar  by  securing  the  signatures  of  all  grocers  in 
the  city  to  pledge  not  to  sell  below  a  specified  price  would  be  an 
agreement  in  restraint  of  trade  and  hence  unlawful.  The  same 
would  be  true  of  an  agreement  including  only  the  members  of  the 
association,  if  such  an  agreement  could  be  shown  to  exercise  an 
influence  over  the  supply  and  hence  be  in  restraint  of  trade. 

The  second  method  of  price  control  that  has  been  employed 
has  been  indirect  in  its  operations.  Until  recently  the  right  of 
the  manufacturer  to  dictate  the  price  at  which  his  product  may 
be  resold  has  not  been  clearly  illegal.  The  confidence  of  the  re- 
tailers in  this  has  been  so  great  that  at  the  annual  convention  of 
the  National  Retail  Grocers'  Association  in  1910,  there  was  re- 
affirmed the  policy  of  the  National  Association  in  favor  of  the 
Pacific  Coast  plan  of  maintaining  retail  selling  prices  and  oppos- 
ing the  publication  of  the  price  on  the  package  of  goods.23  This 
Pacific  Coast  plan  was  for  the  manufacturer  to  set  the  price. 
Various  manufacturers  have  adopted  the  idea.24 

The  legality  of  this  has  not  been  fully  settled  for  all  classes  of 
goods,  but  in  Dr.  Miles  Medical  Company  vs.  John  D.  Park  & 
Sons  (220  U.  S.,  373)  the  Supreme  Court  of  the  United  States 
has  made  it  very  clear  that  the  manufacturer  may  not  dictate  the 
retail  selling  prices  of  articles  not  patented.  Justice  Hughes 
delivered  the  opinion  of  the  court.  The  case  involved  the  right  of 
the  manufacturer  of  certain  proprietary  medicines,  unpatented, 
to  dictate  the  price  at  which  both  the  wholesaler  and  retailer 
might  resell  his  goods.  The  court  held  that  there  is  no  distinction 
as  regards  the  point  involved  between  the  case  of  an  article  manu- 
factured by  a  secret  process  and  that  of  one  produced  under  ordi- 
nary conditions.  Nor  does  such  a  manufacturer  have  any  right 
of  action  because  of  any  invasion  of  its  right  to  the  process,  as 
the  question  is  not  one  of  process  of  manufacture,  but  the  manu- 
factured product,  an  article  of  commerce.  In  this  particular  the 
maker  of  proprietary  medicines,  unpatented,  stands  on  the  same 
footing  as  other  manufacturers.  While  a  manufacturer  is  not 
bound  to  make  or  sell  goods,  this  fact  does  not  prove  that  he  may 

23  Decisions  are  so  numerous  as  to  make  enumeration  scarcely  worth  while. 
See  among  many  the  following:  Morris  Run  Coal  Company  vs.  Barclay  Coal 
Company,  68  Pa.  St.,  173,  186;  People  vs.  Milk  Exchange,  145  N.  Y.,  267; 
Bobbs-Merrill  Company  vs.  Straus,  139  Fed.,  155,  177,  189  (C.  C.  N.  Y.,  1905). 

23  Grocers'  Review,  June,  1910,  pp.  193  ff. 

2i  Supra,  p.  289. 


294  E.  M.  Patterson  [June 

impose  every  sort  of  restriction  upon  purchasers.  Nor  may  he 
by  rule  or  notice,  in  absence  of  contract  or  statutory  right,  fix 
prices  for  future  sales,  even  though  the  restriction  be  known  to 
purchasers.  Any  right  that  he  has  to  project  control  beyond  his 
own  sales  must  depend,  not  upon  an  inherent  power  incident  to 
production  and  original  ownership,  but  upon  agreement.  The 
advantages  of  a  standard  retail  price  primarily  concern  the  deal- 
ers, and  the  complainant  in  this  case  (the  manufacturer)  is  on  the 
same  footing  as  the  dealers  themselves  if  they  formed  a  combina- 
tion and  endeavored  to  establish  the  same  restrictions  by  agree- 
ment with  each  other.  But  such  agreements  are  injurious  to  the 
public  interest  and  void.  The  plan,  in  effect,  creates  a  combina- 
tion for  prohibited  purposes.  The  complainant  having  sold  its 
product  at  prices  satisfactory  to  itself  the  public  is  entitled  to 
whatever  advantages  may  be  derived  from  competition  in  the 
subsequent  traffic. 

In  this  case  the  manufacturer  had  designated  the  wholesalers 
and  retailers  as  its  selling  agents,  and  in  a  dissenting  opinion 
Justice  Holmes  points  out  that  if  the  manufacturer  should  make 
the  retail  dealers  agents  in  law  as  well  as  in  name,  and  retain  title 
to  the  goods  until  sold,  the  plan  would  be  beyond  successful 
attack.  It  would  also  seem  possible  for  the  manufacturers  to 
patent  all  of  their  processes  and  sell  their  goods  under  the  protec- 
tion of  patents  and  trade-marks. 

The  first  of  these  arrangements  would  involve  such  an  extensive 
reorganization  of  retail  business  methods  that  it  would  probably 
not  be  a  practical  solution.  The  second  method  is  open  to  the 
same  objection.  Either  of  them  might  ultimately  be  reached  by 
the  courts  as  an  evasion  of  the  plain  intent  of  the  law.  That 
manufacturers  of  patented  articles  may  dictate  the  price  of  resale 
has  not  been  fully  settled,  although  in  Sidney  Henry  et  al.  vs.  A. 
B.  Dick  Company25  the  court  has  given  such  a  broad  interpreta- 
tion to  the  rights  of  a  patentee  that  it  seems  probable  that  such  a 
power  would  be  upheld.  For  the  vast  bulk  of  goods  handled  by 
the  grocer  any  device  for  maintaining  prices  by  methods  direct  or 
indirect,  seems  destined  to  fail. 

The  history  of  this  association  is  suggestive  of  what  such  or- 
ganizations are  able  to  do.  Some  of  its  problems  have  been 
peculiar,  but  on  the  whole  they  are  typical.  Cooperation  among 
retailers  will  succeed  only  within  certain  limits.  In  the  first  place 
every  movement  must  take  into  account  the  welfare  of  both  the 
grocer  and  the  public.     The  average  purchaser  gains,  or  imagines 

95  Supreme  Court  of  the  United  States,  No.  20,  October  term,  1911. 


1915]      Cooperation  among  Retail  Grocers  in  Philadelphia         295 

he  does,  from  the  chain  store,  from  the  department  store  grocery 
and  from  the  trading  stamp.  So  long  as  the  public  maintains  this 
attitude  the  association  cannot  hope  to  offer  successful  opposition 
to  their  existence.  The  same  is  true  of  any  attempt  to  control 
prices.  Even  if  there  were  no  legal  objections  it  is  doubtful  if 
the  grocers  could  carry  out  a  policy  of  price  control  in  the  face 
of  public  opposition.  The  grocers  are  too  numerous  and  only  10 
per  cent,  of  them  in  Philadelphia  are  organized.  Public  opinion 
would  be  so  strong  as  to  prevent  effective  control  under  such 
conditions. 

On  the  other  hand,  there  are  many  things  the  association  cannot 
do  because  of  the  nature  of  its  membership.  An  employment 
agency  is  not  in  frequent  enough  demand  by  the  average  grocer 
to  make  its  maintenance  profitable.  A  collection  department  or 
a  credit  department  seem  to  make  too  heavy  a  demand  on  the 
grocer.  He  is  unwilling  to  admit  his  poor  judgment  and  reveal 
to  the  association  his  bad  debts  or  to  insist  that  his  customers 
show  evidence  of  their  ability  to  settle  for  goods  purchased. 

The  real  success  of  the  association  has  been  in  two  lines.  The 
first  is  its  ability  to  hold  together  a  somewhat  diverse  membership 
in  a  very  remarkable  manner.  This  has  been  done  by  concentra- 
ting in  the  association  as  many  as  possible  of  the  interests  of  each 
member.  The  second  has  been  in  its  cooperative  buying.  This  in 
no  way  injures  the  public,  but  to  some  extent  doubtless  makes 
possible  the  offering  of  better  bargains  at  retail.  The  manufac- 
turer is  not  harmed  because  he  is  not  dealing  with  small  irre- 
sponsible retailers,  but  with  an  organization  of  large  capital  under 
efficient  management.  The  only  person  injured  has  been  the 
jobber,  and  his  opposition  has  been  ineffective. 


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